The Financial Crimes Enforcement Network (FinCEN) released a statement to financial institutions on March 16, 2020, concerning the COVID-19 pandemic. The statement covered two main topics: Potential delays by financial institutions in filing required Bank Secrecy Act (BSA) reports Remaining alert to identify malicious or fraudulent transactions, which often arise during natural disasters First, FinCEN addressed COVID-19-affected financial institutions that have concern over potential delays in their ability to file required BSA reports. It encourages…

As the Coronavirus, or COVID-19, continues to spread, the widespread impact on the markets, trading, firm operations, compliance obligations – every facet of the market, firms, and individuals working in the industry and customers are affected. Securities regulators and industry associations are racing to issue guidance, relief, and information to assist the industry. This post addresses a number of the recent securities regulator announcements, and we will continue to send updates as regulator guidance and…

Entities registered with the North American Electric Reliability Corporation (NERC) to comply with mandatory electric reliability standards (Reliability Standards) or face civil penalties should take note of an order issued by the Federal Energy Regulatory Commission (FERC) on January 23, 2020 in Docket No. RR19-7-000 (January 23 Order).  In the January 23 Order, FERC, which oversees NERC in its role as the Electric Reliability Organization (ERO), ordered NERC to revise and refine its “NERC Sanctions Guidelines” that…

FINRA’s examination program has undergone its most significant reorganization in decades. As stated in a press release, Oct. 1, 2018, FINRA’s goal for the reorganization was to “consolidate its Examination and Risk Monitoring Programs, integrating three separate programs into a single, unified program to drive more effective oversight and greater consistency, eliminate duplication and create a single point of accountability for the examination of firms.” The new look of the examination program was released…

On January 7, 2020, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) released its 2020 examination priorities.  OCIE is prioritizing practices, products, and services that it believes present heightened risks to investors or market integrity.  The examination priorities are organized around seven themes, many of which build on OCIE’s priorities from prior years: Retail investor protection, including seniors and those saving for retirement; Market infrastructure; Information security; Focus areas relating…

On Oct. 18, 2019, the Securities and Exchange Commission (SEC) Division of Investment Management staff published Frequently Asked Questions Regarding Disclosure of Certain Financial Conflicts Related to Investment Adviser Compensation (FAQs). Many in the industry view the FAQs as overdue SEC guidance in an area that has been a focus of the SEC Division of Enforcement. Registered investment advisers (RIAs) should review the FAQs in light of continuing enforcement actions in this area, including the…

The U.S. District Court for the Western District of Texas recently clarified the applicable rate for the calculation of prejudgment interest under the Texas Securities Act (TSA). In FDIC v. Deutsche Bank Securities Inc., the FDIC, acting as receiver for Guaranty Bank, brought claims against the defendant bank under the TSA stemming from the sale of residential mortgage-backed securities prior to the financial crisis. While discovery was ongoing, the defendant moved for partial summary judgment…